By the time you sit down with your accountant in March, the year is finished and almost every meaningful decision has already been made. Year-end planning is not paperwork you do in spring. It is a set of decisions with a hard December 31 deadline.
Here is what is actually available, ordered by how early you need to start.
Start now: retirement plan design
Some plans can be established after year end and funded up to the filing deadline. Others must exist before December 31 to count for the year at all.
If you are considering moving beyond a SEP — a safe harbor 401(k), a cross-tested profit sharing design, a cash balance plan — that work involves a third party administrator, a plan document and often an actuary. Starting in December is starting too late. Starting in October is comfortable.
2026 figures worth having in mind: $24,500 elective deferral, $8,000 catch-up at 50 and over, $11,250 for ages 60 to 63, and $72,000 total annual additions per participant.
Start now: equipment placed in service
The deduction depends on when equipment is placed in service, not when it was ordered or paid for. Something sitting in a crate on December 31 does not count.
Section 179 allows up to $2,500,000 for tax years beginning in 2025, phasing down above $4,000,000 of purchases and limited by taxable income. 100% bonus depreciation applies to qualifying property acquired after January 19, 2025 and is not income-limited.
Remember California does not conform to bonus depreciation, so the state result differs from the federal one. Plan around both.
By early December: income and expense timing
If you are on cash basis, you have genuine control here.
- Defer income by invoicing late in December so payment arrives in January — only sensible if you expect a lower rate next year
- Accelerate expenses by paying January obligations in December
- Prepay insurance, subscriptions or rent where the rules permit
The instinct is always to defer income and accelerate deductions. That is right only when this year’s marginal rate is at least as high as next year’s. If the business is growing sharply, the opposite can be true, and accelerating income into the cheaper year is the better move. This is why it needs a projection rather than a reflex.
By mid-December: entity and compensation review
If you are an S corporation, confirm that reasonable compensation has actually been paid through payroll during the year. This cannot be fixed retroactively in March. If you have been taking draws with no W-2 wages, December is your last chance to correct it.
Also worth reviewing: shareholder health insurance, which needs to run through payroll correctly to be deductible.
By mid-December: charitable strategy
Donor advised funds and gifts of appreciated securities both take time to execute — brokerages get slow in late December. Giving appreciated stock held long term generally beats giving cash, because you deduct the value without recognising the gain.
Before December 31: the accountable plan catch-up
If you have an accountable plan and have not been submitting expense reports, do the year’s reimbursements before year end with proper documentation. If you do not have one and you operate through a corporation, this is worth setting up for next year.
Before December 31: clean up the books
Unglamorous and genuinely valuable:
- Write off receivables that are genuinely uncollectible
- Deal with obsolete inventory
- Reconcile shareholder and partner loan accounts, which draw attention when they drift
- Confirm every contractor who will need a 1099 has a current W-9 on file
- Reconcile payroll to the general ledger before the W-2s are produced
What is still available after December 31
Not nothing, but not much:
- Funding certain retirement plans that were established in time
- Traditional and Roth IRA contributions up to the filing deadline
- HSA contributions up to the filing deadline
- Some elections made with the return
Everything else on this page closes on December 31. Which is really the whole argument for having the conversation in October.
Talk it through with a Fresno CPA
We run year-end projections in the autumn so these decisions get made while they are still available. Learn more about our business tax planning work.
Schedule a meeting or call 559-372-9213.
This post is general information, not advice for your specific situation. Tax figures are current for the year stated and many are indexed annually. Talk to a CPA before acting on any of it.
